NBR Analysis: 2009-2012

Aftershock: The 112th Congress and Post-Crisis Asia

123 Aftershock: The 112th Congress and Post-Crisis Asia Edward Gresser & Daniel Twining Edward Gresser is Director of the nonprofit organization ProgressiveEconomy. He previously served as Trade and Global Markets Project Director for the Progressive Policy Institute and the Democratic Leadership Council, as Policy Advisor to the U.S. Trade Representative, and as a staff aide for Senator Max Baucus (D-MT). He can be reached at . Daniel Twining is Senior Fellow for Asia at the German Marshall Fund of the United States. He previously served as a member of the State Department’s Policy Planning staff and as Foreign Policy Advisor to Senator John McCain. He can be reached at . 124 Executive Summary This essay examines the 112th Congress and the key policy issues in Asia that this Congress will face. Main Argument Four issues will confront the 112th Congress almost immediately. The Korea-U.S. Free Trade Agreement (KORUS FTA) will likely be Congress’s most important Asia policy vote. The risk of war on the Korean Peninsula is higher than in the recent past, and Congress will need to ensure that U.S. forces receive the support and resources necessary to prevail in any conflict against North Korea. Stronger and in a nationalistic mood, China has been testing the resolve of the international community on issues from maritime security to trade, leading senior members of the new Republican House majority to call for changes in policy. Congressional appropriations on funding for Afghanistan will likely proceed, but will also frame the debate on policy toward that country during the 2012 presidential campaign. Additionally, in the long run the question of U.S. finances and their relationship to the U.S. role in regional security will be as important as any other issue. Policy Implications • The U.S. should pursue a confident approach to trade through congressional action on KORUS and—if concluded—the Trans-Pacific Partnership as part of a larger strategy to encourage exports and more effectively tap Asia’s growth. • A bold yet thoughtful response is needed to the national fiscal dilemma, which if not wisely managed could lead to unprioritized changes in security funding that undermine Washington’s ability to fulfill its treaty commitments in Asia. • Any decline in U.S. military spending should be structured so as to ensure that the U.S. can perform its role as a guarantor of peace and stability on the Korean Peninsula, in the Taiwan Strait, and in regional maritime disputes. • An appreciation of America’s enduring strengths should be a source of confidence for the 112th Congress. With the right choices, the U.S. will meet the challenges in Asia, draw benefits from Asian growth and peace, and continue to shape the future. 125 T he new Congress takes over as a much-debated transformation of the world economy accelerates. China and India have emerged from the 2008 financial crisis with a rising share of the global economy and growing technological capacity and military capabilities. Within Asia, their growth has sped up the pace of economic integration and bolstered the confidence of Asian governments. However, this trend has also appeared to increase tension and suspicion among most of the major Asian powers. Meanwhile, Americans grapple at home with a sluggish economic recovery and an unemployment crisis unmatched since the stagflation era from 1974 to 1982. Traditional allies in Japan and Europe are equally troubled. And looking ahead to the years beyond the 112th Congress, the United States faces an unavoidable era of fiscal contraction, as rising health and retirement costs outpace government revenue— raising questions not only about domestic affairs but also about the sustainability of U.S. commitments in the Pacific. The 112th Congress will be charged with assessing and responding to these profound shifts in the landscape while also considering a vast array of specific Asia policy questions spanning the region and the spectrum of issues, from the Afghan mountains to the sea lanes of the Pacific, and from currency flows to human rights. Four issues will confront Congress almost immediately: the Korea-U.S. Free Trade Agreement (KORUS FTA), North Korea, policy toward China, and policy toward Afghanistan. • The KORUS FTA. This much-delayed agreement, concluded in December 2010, will likely be the 112th Congress’s most important Asia policy vote. The response of Congress to KORUS will test U.S. support for a critical alliance relationship, decide the Obama administration’s...